Exchange: Acquiring and Retaining Tomorrow’s Consumer

It has been a year like no other; retail has been forced to quickly adapt and weather a constantly changing landscape with continued challenges. All against the backdrop of a consumer that is evolving – in both expectations and behaviours. It’s now essential to deliver an experience that is memorable and effortless to first attract – and then retain – the attention (and purse) of tomorrow’s consumer. Retail must continue to grapple with macro consumer trends whilst developing a streamlined journey from discovery to purchase in order to survive.

At our recent Residential Exchange meeting we were joined by our community to discuss acquiring and retaining tomorrow’s consumer. Check out our newest scribe below highlighting some of the key trends, as well as the individual takeaways from the roundtable discussions… Enjoy!

Key Takeaways

Developing an Adaptive Organisational Mindset

  • Shift from always focusing on new customer acquisition to LTV & Loyalty
  • Challenges of hybrid working
  • LTV of customers and price of acquiring new customers is changing
  • How do we harness technology to make remote working feel more inclusive?
  • Need to recognise that today’s employee is not the same as 2 years ago
  • Mutually beneficial profitable retail collaboration
  • Need for retention – must get staff up to customers post pandemic expectations
  • Cross functional collaboration
  • How do we become better at dealing with uncertainty?
  • The agility we enjoyed during lockdown has disappeared, how do we get it back?
  • Bring retail staff on the journey, they are the digital transformation
  • Focusing on customers/making a journey customer centric is key
  • We are now worse off due to going back to structured agility
  • The combination of covid and Brexit caused supply chain issues. Also having to deal with a great deal of issues born from the current environment
  • Move from sales focus to customer and acquisition
  • Organisation and process changes are needed. Customer first mindset.
  • Challenge of keeping innovative approach of pandemic times
  • Moving from sales first to customer first. Offline and online are not competing against each other.
  • How do we keep the positive, adaptive agility that teams had at the start of the pandemic?
  • Unrealistic expectations of online – need to reset
  • Continue to innovate to break down selling channel barriers
  • Move from transactional customer relationship to engagement and community
  • We are now much better at talking to customers, can’t just have a transactional relationship
  • Customers aren’t just a transaction, talk to them like humans!
  • Brands are better at talking to customers post pandemic
  • Collaboration, omnichannel, clienteling, virtual/instore
  • Adapting from retail to omnichannel with customer service/experience
  • Important to take a more nurturing approach to customer communication
  • Openness of conversation and discussion – great to have a view of cross industry challenges
  • Use digital to learn your customer – but get the pulse of the floor to build your service level
  • Investment in digital and focus on the human element of commerce to connect with people instead of focusing on brand.

Reducing Friction from Encounter to Checkout

  • Reducing friction vs protecting AOV
  • Place checkout where the customer is
  • Big reminder of the importance of incorporating loyalty into one click checkout
  • Reducing friction is moving up the funnel
  • Important to balance speed/simplicity with customer communication, upsell etc.
  • Use data to give the customer the path they want to use to pay
  • Friction is often more of an issue in product discovery and decision-making process than checkout
  • Think out of the box to reduce friction
  • Reduce friction by trialling the data input from the user’s experience
  • Reducing friction is a good thing but potentially conflicts with retailer needs 
  • Swift checkouts incorporating loyalty offering
  • Balance commerce with optimising checkout
  • Friction reduction in discovery
  • Ease of use payment security
  • Consider role of human assistance as part of customer journey
  • Video assisted checkout
  • Social commerce is huge, connecting to the checkout is hard
  • Personalisation, data, customer expectations – is there a one size fits all solution?
  • Personal checkout, the customer can take with them on all journeys
  • Technology needs to catch up to enable testing to reduce friction
  • No customers are the same – personalise your sale/checkout
  • Balancing consumer objectives i.e. I want to check out fast with retailers’ objectives i.e membership/cross sell etc.
  • Delivery and payment data = easy to shop – what is the right balance to find????????
  • Balancing the benefit of friction/reward to drive value
  • Cross sell/up sell opportunities sometimes require friction – right place on site in imperative
  • Getting basics right is very important, don’t get lost in complexity
  • International growth is a challenge
  • Friction takes many forms depending on tech inhibit
  • Combination of products to make a smooth process
  • Every process has a chance to cause friction to put off sales
  • Checkout friction – checkout from where?

Acquisition vs Retention

  • Diversify channels knowing it’s possible we may lose access to some
  • Acquisition pricing is challenging in every industry – safe search from google is a nightmare
  • Live shopping – what would this look like?
  • Diversify marketing channels given power of google
  • Channel diversification is critical for acquisition and retention 
  • Be where your customers are
  • Live shopping is a channel to explore
  • No fixed mix of spend between acquisition and retention – very difficult balance to achieve
  • How is my business perceived on my non owned channels?
  • Striking a balance between retention and acquisition is difficult
  • Acquisition vs retention? How do you do both?

Digital Human Experiences

  • How do we make digital better at ‘listening;’ to our customers as humans do?
  • Ask the right questions – what experience does the consumer want?
  • Only make decisions based on the consumer despite how difficult
  • Keep it simple, keep it human
  • Look at ways your desired product allows for necessary tech experience
  • It’s all about finding the right phygital mix for your audience
  • How do you blend the digital/human experience when thinking about in-store experience and online
  • Consumers that have a mission purpose are far more informed than store associates
  • Next generation will want voice/mobile to deliver human experience
  • What comes next after AI? Voice? Video?
  • Consider points where human interaction adds value – Price/consideration
  • Are we human or are we chatbots? When should we step in the assist/convert/retain
  • Digital is great for scaling human capability but doesn’t have the human touch
  • Post purchase video check in 

Using Owned Channels to Maximise Customer LTV

  • Consolidation of multiple data sources still a material issue for multichannel networks
  • Growth and cost of acquisition
  • Adapting marketing and data capture along with legal changes
  • Customer acquisition is increasingly challenging in digital both from tech and process point of view
  • Need to give more thought to how to identify unknown browsers and in store shoppers
  • Strategy to deal with IOS and cookie tracking changes for customer tracking
  • Understanding the customer from unknown to known driving value across the touchpoints
  • All brands are seeing high media – a return to traditional media
  • Greater focus needed on attribution models for brand marketing spend
  • Reversion to traditional advertising channels
  • Data is increasingly unreliable – revisit OOH Marketing? More full funnel approach
  • Brand marketing impact on customer LTV & Loyalty
  • Paid media affiliate is driving interest in traditional media
  • Go brand – Bus Weapon – Black Friday – TV is back
  • Brand ROI assessment 
  • Need to amend the metrics we track – Invest in brand marketing to engage returning customers
  • Challenge of uncertainty and therefore whether LTV is achievable 
  • Once customers are through the door, what should focus be on in their journey after that? Brand awareness?
  • Need to be adaptive to your target customer – different markets have different attitudes
  • No one has cracked this!! Need to go beyond current marketing funnel
  • How do customers want to journey through our brand?
  • Cost of acquisition – drives need to increase retention
  • Higher acquisition costs work if LTV increases

Seamless Sustainable Operations

  • Trust transparency and measurability/validation of claims
  • Working to a model is very important as you can’t address everything
  • Packaging, trust, consciousness, do we talk to our customers enough and find out their insights?
  • What do customers want, vs what they expect? Would they be happy with sustainable packaging if it risked damage to their item?
  • More efficient business models by adopting sustainable practices
  • Consumers having visibility of sustainability impact of supply chains
  • Trust, transparency across the business starting with the product
  • Boards have to consider ‘profit and planet’
  • Sustainability is a short term cost for long term gain/survival
  • Do customers value/understand sustainability?
  • It’s very important to find the balance between sustainability & Green washing
  • Difficult to talk authentically about sustainability
  • Forecasting is as hard as it has ever been!
  • Expediency vs principle! Look at solutions that de-stress logistics and increase sustainability
  • How can each method of production and distribution be more sustainable?
  • Need to review how we can fulfil from store!
  • 2020 and 2021 outlaws! This year is a reset year
  • Need buy in from the top
  • Sustainability starts at the top and needs to be more than carbon offset!
  • For success on sustainable operations you NEED buy in from leadership
  • Drive for profit vs plant needs to be set at the top
  • Sustainability has to come from and be supported from the top down
  • Concept of ‘healthy marketing’ not encouraging excess consumerism but how brand can encourage public focus on sustainability
  • Sustainable tax

Single View of Customer Data

  • Scanning Data is key
  • Why are you doing it? What do you expect from it? Who will it benefit?
  • Know why you need to build a single customer view
  • Determine cost vs benefit of any additional data collection/processing
  • What extra data is worth the extra cost?
  • Be thoughtful about which data is a actually needed/going to add value
  • Customers will say they are interested in things that the data doesn’t agree with 
  • Customer vision is business vision
  • Shopify flexibility on tools, customer data
  • How can we assess potential incremental value from bringing in data to an SCV
  • Beware the legacy systems!
  • SCV is important as long as you have an actionable outcome from the data
  • Wholesale SCV? App? OR Code? Loyalty
  • Build your tech stack in such a way that you can easily adopt new technologies
  • Personalised direct mail
  • The ability to link by card data

Boosting Conversion with a Personalised Touch

  • How far to go? Can content follow the level of the consumer’s needs?
  • Personalisation can be easily light touch just by being dynamic e.g by country
  • Personalisation is key but there is still no sure-fire approach to action in the industry
  • Journey of personalisation is a long one – it’s important to make the first steps now.
  • Still got a long way to go!
  • Personalisation goes beyond knowing the customer’s name, but you should also be weary of being too intrusive
  • Opportunity
  • Personalisation will become “normal” but will it be overt to the customer?
  • When do we ask the customer what we/they want? Is the personalisation relevant?
  • Using attributes across products and customer to surface products
  • There are many options to personalise a recommendation
  • Personalisation tools are essential, but implementation isn’t straight forward
  • Be aware to not become so personalised that customers end up in an echo chamber
  • Challenge to balance/blend personalisation with relevancy

Customer Experience of Loyalty

  • Loyalty through lifestyle benefits (community, in person events) rather than through discounts/commercial
  • Loyalty isn’t all about discounting – Community, Exclusives etc.
  • Where does loyalty and discount coexist
  • Loyalty on reward programmes need to ass clear value, not just a discount channel
  • Validation of going after community and money cant buy benefits
  • Loyalty means different things to different consumers
  • Added value must be seen through loyalty
  • What are the new ways to surprise and delight?
  • Loyalty schemes can take new shapes and don’t have to include points
  • Think about experiences instead of points as rewards
  • Keep rewards diverse and innovative, don’t be too formulaic
  • Removing barriers to entry, simplify the offer, communicate concisely
  • Using unusual data sources e.g Strava to enrich loyalty activities
  • Delight consumers
  • Identify consumer robustly and be flexible to what offers are and how they redeem them
  • Be clear on what behaviours you want to drive before designing the scheme

We’ll be continuing the conversation at the following upcoming meetings… See you there?

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